Page images
PDF
EPUB
[ocr errors][merged small][merged small][merged small][merged small][ocr errors][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][ocr errors][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small]

1966 estimate

[blocks in formation]

REVOLVING AND MANAGEMENT FUNDS—Con.

Clothing and textiles: Intragovernmental funds-Continued

Operating and other stocks.

Mobilization reserve stocks.
ARMY STOCK FUND-Continued

Long supply

Subsistence: in U.S. Army Europe, U.S. Army Alaska, and U.S. Army

Operating and other stocks. Southern Command. Also a new division has been estab- Mobilization reserve stocks.

Long supply. lished under the Army Materiel Command to include those

General supplies: inventories at installations under the Army Materiel Operating and other stocks.

Mobilization reserve stocks. Command and The Surgeon General. In addition, the

Long supply.-U.S. Army Pacific Division has been extended to include

Ground equipment parts and supplies: inventories in Korea and Okinawa. During 1965 selected Operating and other stocks..

Mobilization reserve stocks. secondary items coded for repair at depot level, insurance

Long supply type items and items essential to the safety of personnel Aeronautical supplies:

Operating and other stocks. have been removed from the fund and are financed there

Mobilization reserve stocks. after by the appropriation Procurement of equipment and

Long supply.

Medical-dental supplies: missiles, Army. In 1966 selected aeronautical secondary

Operating and other stocks. items will be transferred from that appropriation and Mobilization reserve stocks. financed under this fund. The effect of these changes is Long supply

Missile parts: summarized by category as follows (in thousands of

Operating and other stocks. dollars):

Mobilization reserve stocks. 1964 actual 1965 estimate

Long supply Clothing and textiles..

-14,560 -64,805

Tank and automotive supplies: Subsistence.. –54.956 - 139,519

Operating and other stocks. General supplies -10,616 – 35,553

Mobilization reserve stocks. Ground equipment parts and supplies. -85,080 –77,599

Long supply Aeronautical supplies.

8,507 -25,582 42,900 Weapons and fire control supplies: Medical-dental supplies.

-16,583 –42,315 78,000 Operating and other stocks Missile parts... –46,568 -34, 709

Mobilization reserve stocks. Tank and automotive supplies...

23,028 - 109,378

Long supply. Weapons and fire control supplies.. -5,199 -30,284

Special weapons and chemical supplies: Special weapons and chemical supplies. -10,261 -28,455

Operating and other stocks. Industrial supplies.

–4,632 -11,597

Mobilization reserve stocks. Petroleum products-25,130 -38,163

Long supply -Electronics supplies

-74,008 –86,534

Industrial supplies: Defense Supply Service..

Operating and other stocks. Continental Army Command supplies. 159,730 -7,635

Mobilization reserve stocks. Other continental U.S. supplies..

41,488

Long supply European area supplies..

541,551

Petroleum products: Pacific area supplies..

111,343 200,533

Operating and other stocks. Alaska area supplies.

23,695

Mobilization reserve stocks Southern area supplies..

14,076

Long supply..

Electronics supplies: Inventory received from or donated

Operating and other stocks. to other accounts

–44.985 89,215 120,900 Mobilization reserve stocks. Stock withdrawal credits established. -9,600

Long supply-Increase or decrease in undelivered pur

Defense Supply Service: Operating and chases to be paid from other accounts... -3,655 -16,611

other stocks,

Continental Army Command supplies:
Net change in capitalized inven-

Operating and other stocks.
tory-
–58,240 72,603 120.900 Mobilization reserve stocks.

Long supply

Other continental U.S. supplies: The increase of $73 million for 1965 results primarily Operating and other stocks.

Mobilization reserve stocks, from capitalization of inventories in Okinawa and Korea.

Long supply The increase of $121 million for 1966 reflects the transfer European area supplies: of selected air items to the stock fund, discussed above,

Operating and other stocks.

Mobilization reserve stocks. and capitalization of medical mobilization reserve stocks

Long supply --from the Defense Supply Agency.

Pacific area supplies: Budget program.The increase in obligations for 1965

Operating and other stocks.

Mobilization reserve stocks. and 1966 results primarily from the extension of the Long supply... command stock fund divisions. Continued emphasis is

Alaska area supplies: being placed on maximum utilization of long-supply stocks

Operating and other stocks.

Mobilization reserve stocks. and on conservative procurement of material in relation Long supply.--to sales requirements. Obligations for peacetime operat

Southern area supplies: ing stocks were 92% of sales in 1964 and are projected at

Operating and other stocks.

Mobilization reserve stocks 89% of sales in 1965 and 1966, respectively. The program

Long supplyreflects procurement for augmentation of mobilization

Summary: reserve stocks of $33 million in 1964, $35 million in 1965,

Operating and other stocks.

Mobilization reserve stocks. and $34 million in 1966. The program provides for

Long supply... year-end inventories as follows (in millions of dollars):

Total inventories

[merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][ocr errors][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][merged small][ocr errors][merged small][ocr errors][merged small][merged small][merged small][ocr errors][merged small][merged small][merged small][merged small][merged small]
[blocks in formation]

Total inventory is estimated to decline by $320 million for the 3-year period from the beginning of 1964 to the end of 1966. Of this, $145 million is due to sales of stock without replacement and $340 million from disposals, donations and adjustments. These decreases are partially offset by a net increase in capitalization of $165 million.

Costs exceed obligations by a total of $562 million for the 3 years presented here, because inventory is being sold or disposed of at a faster rate than it is being ordered.

Financing the budget program.-Funds for financing the budget program are derived from sales to authorized customers. Sales are forecast to increase by $408 million from 1964 to 1966. The relationship of cash expenditures and collections is as follows (in thousands of dollars):

1964 actual 1965 estimate 1966 estimate Gross expenditures.

1,834,504 2,126,600 2,146,700 Applicable receipts.

1,877,086 2,220,400 2,279,700 Net expenditures...

-42,582 -93,800 -133,000

27.899 1,844.691

20,266 -10,000

16,611 1,643

253

248

[blocks in formation]

A transfer of $35 million to Military personnel, Army, is reflected for 1965 and $155 million in 1966 in keeping with the practice of transferring unneeded balances from this fund to offset the need for new obligational authority.

Operating results and financial condition. The net loss was $74 million in 1964 and is forecast at $111 million in 1965 and $39 million in 1966 due to losses on disposal or donation of stocks in long supply.

Government equity at the end of 1966 is estimated at $2,138.2 million, consisting of $9,887.8 million in inventory and other assets capitalized, less $3,407.2 million in net cash withdrawals or transfers from the fund and $4,342.4 million cumulative operating loss, the latter due primarily to disposal of stocks which were excess at the time of capitalization or determined to be excess as a result of purification of stocks.

Revenue, Expense, and Retained Earnings (in thousands of dollars)

[blocks in formation]
[blocks in formation]

494,820

1,374

Unpaid undelivered

orders 1 Unobligated balance.. Unfilled customer orders

on hand Invested capital and earn

[blocks in formation]
[blocks in formation]

ings

2,214,320

Revenue:
Sale of goods-
Stock withdrawal credits..

Total sale of goods...

[blocks in formation]

1,871,743

9,600

Total Government

equity--

[blocks in formation]
[blocks in formation]

i The changes in these items are reflected on the program and financing schedule.

Expense:

Purchase of goods (at cost). Transportation Repair of unserviceable inventory. Other operating expense. Inventory decrease Inventories donated from (-) or to

other accounts, (capitalized)

[blocks in formation]
[blocks in formation]
[blocks in formation]

Total expense.

[blocks in formation]

Net loss for the year. Deficit, start of year.

[blocks in formation]

-73,962 -111.502 -38,743 -4,118,166 -4,192,128 -4,303,630

Deficit, end of year.

-4,192,128 -4,303,630 -4,342,373

99.0

[blocks in formation]
[blocks in formation]
[ocr errors]

are identified on the statement of financial

[blocks in formation]

Financing:
Receipts and reimbursements

from:
Sale of goods:
Clothing and textiles.

–55,947 Photographic material.

-2,596 Fleet material support of

fice-retail commodities. - -170,620 Ships, submarine and base repair parts.

-133,252 Forms and printed matter -- -8,578 Retail provisions -

-186,901 Electronic repair parts. -68, 289 Ships store and commissary store stock..

-246,746 Fuels and related items - 346, 460 Ordnance repair parts.

-11,124 Other...

- 372

-191,847 –194,251

[blocks in formation]

Appropriation to liquidate contract

authorization ...

-256,393 –264,722 -323,160 –314,398 -9,904 -11,046

-500 -500

[blocks in formation]
[ocr errors]
[blocks in formation]

This fund, initially established in 1893, finances the procurement and maintenance of inventories of commonuse material and supplies for resale and mobilization reserve (10 U.S.C. 2208). It includes items in all levels of shore-based inventories, and in fleet issue ships and service force vessels afloat.

Reductions in inventories capitalized under the fund are due principally to transfers of material from this fund to Navy, procurement appropriations for financing.

These include insurance items, items essential to the safety of personnel, and certain high cost reparable items. Other reductions resulted from transfers to the Defense Supply Agency. The net effect of these changes by category is as follows (in thousands of dollars):

11964 actual Schedule of capitalized inventories:

Retail special and resale clothing -- -9,021
Ships, submarine and base repair parts. -112,560
Retail provisions

-3,577 Electronic repair parts.

-20,959 - 34,548 Ordnance repair parts.

-48,682

-27,809 Fleet material support office-retail commodities

-82,423 -26,362

10,000

55,000

43,646

39,110

21,616

New obligational authority.

1965 estimate 1966 estimele

Relation of obligations to expendi

tures:

-80,193 -19,762

-1,682

-2,109

10 Total obligations

1,205,563 1,155,000 1,133,500 70 Receipts and other offsets (items 11-17)--

-1,249,209 -1,204,110 -1,210,116 71

Obligations affecting ex-
penditures

-43,646 -49,110 -76,616 72.98 Obligated balance, start of year.. 210,810 200,798 171,688 74.98 Obligated balance, end of year.. -200,798 -171,688 -148,072 90 Expenditures

-33,633 —20,000 -53,000

[blocks in formation]

1963 actual

1965 estimate

1966 estimate

funding is not required. The budget program provides authorization in the amount of $148.8 million was availfor year-end inventories as follows (in millions of dollars): able at the start of 1964. This is necessary because the

leadtime on material to be procured is greater than the 1964 actual

time required to fill and collect for customer orders. As Retail special and resale clothing:

indicated in the statements, the current assets available Operating and other stocks. 28.1 19.6 19.5 18.9

and reflected for 1965 and 1966 will provide adeguate reMobilization reserve stocks.

6.9 6.9 7.4 8.5 Long supply... 5.8 3.5 2.8 2.0

sources for fund operations. The contract authorization Photographic material:

of $148 million available at the start of 1964 is reduced to Operating and other stocks.

3.2
3.1

4.9 4.3 $44 million at the end of 1966, because customer orders are Mobilization reserve stocks

.6 .7 .7. 1.3

forecast to exceed obligations through the 3 years shown. Long supply..

3.9 2.3 1.3 .3 Ships, submarine and base repair parts:

Operating results and financial condition. -An operating Operating and other stocks.

209.4 136.4 121.1 85.7 loss of $63 million is estimated for 1965, to result primarily Mobilization reserve stocks. 93.5 27.6 32.6 73.1

from losses on disposal of material in long supply. A Long supply. 239.5 172.0 79.7 37.8

gain of $18 million is estimated for 1966. Forms and printed matter: Operating and other stocks.

2.2 1.9 2.9 2.9 Government equity at June 30, 1966, is estimated at Mobilization reserve stocks.

.1

1
.1

.1 $885.8 million consisting of $238.8 million in appropriations Long supply.

3.5 3.7 1.9 1.4 Retail provisions:

and cash transfers, $1,539.4 million from capitalization Operating and other stocks

55.6 41.9 40.6 40.9 of inventory and other assets, less $892 million deficit. Mobilization reserve stocks.

6.7 6.8 6.8 7.3 Electronic repair parts:

Revenue, Expense, and Retained Earnings (in thousands of dollars) Operating and other stocks.

137.1 115.8 68.5 61.3 Mobilization reserve stocks

10.4

4.3 15.3 Long supply 111.4 75.7 45.2 38.5

estimate Ships store and commissary store stock: Operating and other stocks.

37.4 25.7 26.6 27.3 Fuels and related items:

Revenue: Sale of goods..

1,230,885 1.200,767 1.204,813 Operating and other stocks

53.2 32.5

31.3 30.3 Mobilization reserve stocks

Expense: 98.6 96.5 96.5 96.5 Long supply:

Purchase of goods (at cost).

1,094,107 1,120,557 1,093,978 7.0 Transportation

58,279 54,101 51,761

2,716 Repair of unservicable inventory..

782 674 Operating and other stocks

61.8

25.4 15.2 14.6 Mobilization reserve stocks

Profits from sale of ships' stores paid to 10.0 4.4 3.1 7.6

"Ships' stores profits, Navy" (trust fund). 4,971 5,000 Long supply

5,000 88.6 66.0 22.9 16.3

-552 Other operating expense.

327 400 Fleet material support office-retail

Inventory decrease.

398,854 252,095 commodities:

58,144 Operating and other stocks.

Inventories donated to other accounts (de87.5 93.8 99.8 84.9 Mobilization reserve stocks.

capitalized)

-277,222 -168,912 -23,553 23.4 28.8 46.7 Long supply

73.0 62.4

38.6 21.3 Summary:

Total expense.

1,281,153 1,263,950 11,186,404 Operating and other stocks. 675.5 496.1 430.4 371.0 Net loss or gain for year.

-50,268 -63,183 Mobilization reserve stocks

18,409 245.9 173.5 180.3 256.4

Deficit start of
year.

-797,367-847,635 -910,818
532.7 385.6 192.4 117.6
Deficit end of year.

-847,635 -910,818-892, 409 Total inventories.

1,454.1 1,055.2 803.1 745.0

7.1

1966

1964 actual

1965 estimate

Ordnance repair parts:

19.1

Long supply

[blocks in formation]

Total inventory is estimated to decrease by $709.1 million from the beginning of 1964 to the end of 1966. This involves $50 million in sale of stocks without replacement, $243 million through donation or disposal as surplus, and 8470 million in decapitalization, partially offset by increases of $54 million througb returns to the supply system and price changes. For the 3 years presented here, costs exceed obligations by $237 million because inventory is being sold and disposed of at a faster rate than it is being

Financing the budget program.-—-Funds for financing the budget program are derived from sales to authorized customers. The relationship of expenditures and collections is as follows (in thousands of dollars):

Assets:

Treasury balance.
Accounts receivable, net.
Selected assets:

1
Inventories.
Progress payments.
Undistributed disbursements.
Other assets.

ordered.

[blocks in formation]
[blocks in formation]
[blocks in formation]

3,468

39

Gross expenditures.
Applicable receipts.

Net expenditures

4,099
1,615

4,099
1,615

4,099 1,615

Other liabilities 1

[blocks in formation]
[blocks in formation]

1966.

A transfer of $10 million to Military personnel

, Navy is reflected for 1965, in accordance with the 1965 appropriation act, and a transfer of $55 million is proposed for

Department of Defense stock funds are authorized to incur obligations in anticipation of future year business (10 U.S.C.2210(b)). Pursuant to this authority, contract

Government equity:
Non-interest-bearing capital:
Start of year

2,354,195 2,312,856 2,035,633 1,856,721 Unobligated balance transferred

to other accounts (see program and financing)

-15,000

-10,000 -55,000 Unobligated balance transferred

from “Defense stock fund"
(10 U.S.C. 126).

40,000 See footnote at end of table.

[blocks in formation]

Intragovernmental funds—Continued

NAVY STOCK FUND-Continued
Statement of Financial Condition (in thousands of dollars) - Continued

[blocks in formation]
[blocks in formation]

-66,339 -277,222 -168,912–23,553

[blocks in formation]
[blocks in formation]

ac

Deficit:
Start of year

--- 804,251 - 797,369 -847,635 -910,818 Operating gain or loss.

6.882 --50,268 -63,183 18,409

|-797,369 -847,635 -910,818 -892, 409 Total Government equity- 1,515,487 1,187,998 945,903 885,759

Financing-Continued
Receipts and reimbursements-

Continued
Sale of goods-Continued

Communication-electronic-
General material.
Clothing and textiles
Fuel..
Subsistence-commissary.
Proceeds from sale of excess

and other receipts.

Total sale of goods.. 11 Administrative budget

counts:
Military assistance

Other 14 Non-Federal sources (10U.S.C.

2208 (h)). 11 Decrease in unfilled customer

orders:
Military assistance orders...

Other reimbursable orders. 21.98 Unobligated balance available,

start of year.. 23.98 Unobligated balance transferred

to "Military personnel, Marine Corps" (78 Stat. 465 and

annual appropriation act) -24.98 Unobligated balance available,

(-36) (-154) (-87,000) (-86,567) (-87,166)

End of year.

(-40,573) (-43,479) (-46,234)

Analysis of Government Equity (in thousands of dollars)

[blocks in formation]

212.618 194,305 -66,029 – 44,413

-1,159

Unpaid undelivered orders 1

242,929 238,385 Unfunded contract authorization --|-148.786 -105,139 Unfilled military assistance orders on hand

-33,310 –51,635 Invested capital and earnings. 1,454,655 1,106,387

-54,978 -60,281 854, 292 796,148

[blocks in formation]
[blocks in formation]
[blocks in formation]

25.49 Unobligated balance lapsing

(contract authorization).

New obligational authority..

1 The changes in these items are reflected in the program and financing schedule.

Object Classification (in thousands of dollars)

[blocks in formation]
[blocks in formation]

119,916

1 Balances of selected resources condition.

are identified on the statement of financial

« PreviousContinue »